iGrain India - The price of Canadian lentils is largely influenced by two key factors: Australian production and Indian demand.
Australian Production: According to a government report, Australia is expected to see a significant decline in lentil production in the 2024-25 season, with production estimated at 11.16 lakh tonnes. This reduction in supply will impact Australia's ability to export lentils, which could put more pressure on global markets, including Canada, to meet the demand. With Australia's exportable stock shrinking, Canada might benefit from a higher demand for its lentils, potentially influencing prices.
Indian Demand: India remains a crucial market for Canadian lentils, as it is the largest importer. Indian demand is particularly vital, especially since the country is increasing its own lentil sowing area, which could lead to higher domestic production. However, the timing of the duty-free import scheme for lentils in India, which is valid until March 31, 2025, will continue to affect the dynamics of trade. If the Indian government maintains its favorable import policies, Canada could see sustained demand. Moreover, India's demand could be bolstered if domestic production does not meet expectations, or if Australian lentil exports fall short.
Current Market Conditions: In Canada, the lentil harvest for this year has been relatively good, though export performance has not been as strong as expected. Despite this, lentil prices in Western Canada have remained stable or experienced only minor fluctuations. Red lentil prices are stable around 33-34 cents per pound, while prices for green lentils have been steady. The price for large (thick) green lentils is around 58-60 cents per pound, and for small green lentils, it is around 53-54 cents per pound. These prices are unchanged from last week, and medium green lentils have seen no significant price changes either.
Looking ahead, Canadian lentil producers and exporters are focusing on how Australian production levels and Indian demand evolve. The price of lentils in Canada will depend on these factors, with some fluctuation expected as the new season approaches.
Future Outlook: Canadian lentil sowing will occur between April and June next year, and early indicators suggest that the area for green lentils may increase slightly. This will depend on market conditions and the potential for higher demand from India and other markets. The next few months will be critical in determining how Canadian lentil prices and exports are shaped by the ongoing trends in Australia and India.
